Abandon SCHIP: Big Government Returns

“The era of big government is over,” then-President Bill Clinton told us in 1996. Congress’s proposed expansion of SCHIP -- the State Children’s Health Insurance Program -- recalls instead the remark of another Democratic political figure. In 1968, while stumping for president in Indiana, Senator Robert F. Kennedy was asked by medical students, “Who is going to pay for your socialized medical plan?” Kennedy famously responded, “You will!”

In just ten short years SCHIP has gone from being a program for struggling families to a permanent middle class entitlement. The alternative -- a reform of private insurance to expand coverage for all Americans -- has gained little attention during the debate.

Originally established by House Republicans in 1997, SCHIP was meant to insure children of families who do not qualify for Medicaid. The incomes of eligible families generally did not exceed 200 percent of the poverty level. The new version of SCHIP does not stay faithful to the intent of the program.

The congressional expansion of SCHIP raises spending $35 billion over 5 years. Families making more than 400 percent above the poverty line may be eligible for the program. In the state of New York, a family of four earning $83,000 would qualify.

Rampant spending and middle class handouts aren’t the only problems. Half of all new children enrolling will be leaving private insurance, shifting ever more of the health care sector from market to government. Part of the needed funding increase will come from an even higher cigarette tax, making the plan even more regressive and unfair.

Twenty-two million new smokers will be needed to pay for the bill, highly unlikely with a tax increase at 61 cents per pack. Smokers, who tend to be poor and who come from poorer states, will be paying for the health insurance of children of well-to-do parents.

While it is unlikely that smokers will generate much sympathy, the revenue vacuum will surely be turned toward all taxpayers when the tobacco funding dries up. To say it is risky to fund a government program with a declining revenue source is a rank understatement.

Because of the program’s large expansion and the decreasing income limits, SCHIP paves the road for nationalized health care. Representative Steve Rothman (D-NJ) concedes as much, calling the plan, “The next step toward universal health care for all Americans.”

Even normally big-government President Bush has promised a veto of the expanded SCHIP bill, citing excessive cost and the substantial shift from private to government funded insurance. He favors a much smaller increase than the congressional version, one that he says fulfills the intention of the program. His party, however, contains many supporters of the bill currently on Capitol Hill.

Proponents, moreover, have fought back by sending an army of children to the White House to protest the intended veto. In a made for TV moment, the children pulled wagons around the White House loaded with petitions opposing the veto.

New Jersey’s governor has filed a lawsuit against the White House for trying to limit the eligibility for SCHIP. New Jersey currently enrolls families making up to 350 percent above the poverty level, or $72,000.

Jim Wallis of Sojourners, who gained fame by linking the Gospel to big government supports the idea, claiming, “Those who oppose covering the kids now have literally no alternative plan in mind.” But Wallis shuns free market solutions, even denouncing attempts to strengthen social security through market forces. Real compassion and charity are not measured by taxes and the failed poverty policies of the past.

In his zeal for government solutions, Wallis also fails to notice the tension between the Christian mandate to pay special attention to the poor and the regressive principle of SCHIP. It will end up shifting money from poorer individuals and states, to the upper middle class and more affluent states. While states pay a smaller portion of the funding, the more they spend the more dollars they receive.

House Speaker Nancy Pelosi called the President to tell him, “She is praying he will change his mind.” One has to wonder, is anybody praying to counter the loss of common sense and the return of big government?

Ray Nothstine is associate editor at the Acton Institute in Grand Rapids, Mich.